We often hear about the "curse of the lottery" with sad, but all-too-familiar stories like Jack Whittaker, who went bankrupt and lost both his daughter and granddaughter to drug overdoses within four years of winning a $315 million lottery.
Indeed, Sudden Wealth Syndrome is a term coined to describe the guilt people associate with their wealth, the social isolation from friends and family, and the identity crisis that often ensues as a result of having sudden wealth.
And yet, surprisingly, it is not the money per se that causes the increased risk of depression, anxiety, substance abuse and even suicide that comes with being excessively wealthy.
Instead, it is your mindset.
As a wealth psychologist who works with high net worth individuals and families, I have come to the conclusion that true wealth is much more than just money. In fact:
Wealth = Money x Mindset2
Sure, being wealthy requires finances. But true wealth is much more -- and is predicated on an optimal Mindset.
This Mindset Consists of 2 Key Factors:
(1) Your Personal Wealth CodeTM, which is identified by underlying behaviors and attitudes about money that can either lead to personal growth and happiness or to financial misfortune, even failure, as with many lottery winners.
(2) Your ability to navigate the social and psychological pressures of having significant wealth.
Yes, that's right, I said the pressures of having significant wealth.
"I wish I had those problems!" many people will say.
Well, people of significant wealth have their own set of problems. And they are real.
In addition to the above noted increased risk for psychological disorders, people of wealth are often the source of reverse prejudices. Indeed, many of my clients describe previous discriminations even by their past therapists.
As one client described "She made me feel guilty for having stress despite our wealth."
So how best do you handle coming into some serious cash? First and foremost, invest in finding both the best wealth manager and the best wealth psychologist for you.
Hire a financial advisor you trust who can help you address both your short and long-term goals. And defer to your advisor the all-to-frequent "Can I borrow some money?" from "friends" like the kid you sat next to in second grade, so you don't have any guilt about saying "no."
Equally as important, find a wealth psychologist to help you navigate the emotional and social ups and downs of coming into significant wealth. This person will be your guide to developing an optimal mindset so you can truly be happy and flourish.
As one client told me, "I would have saved countless hours of tears and millions of dollars if I had hired you back when I inherited my fortune."
Follow These Three Steps:
1. Focus on unconditional self-worth rather than just net worth: Unconditional self-worth entails believing in yourself based on your values and strengths, independent of material items. When coming into significant wealth, many people buy more and more and more to get that feel-good sense. And yet, research shows that devoting yourself to identifying and applying your characteristic ideals, not buying more stuff, is what brings you true happiness.
2. Combat entitlement and cultivate your sense of purpose: People with wealth are at increased risk of entitlement: thinking the world is here to serve them. They often expect special privileges, accolades or services because of their wealth. This assumption only leads to greater discontent. Instead, cultivate your sense of purpose -- determine how you can positively contribute to the world. For some, that is through a conventional job or volunteer work. Or it may be via focusing on raising your family.
3. Enrich your relationships: We are all social beings. Positive social relationships can help buffer you from depression, anxiety, and other psychological distress. And the happier you are in your relationships, the more likely you are to be able to enjoy this new life of yours.
Once you have won the financial lottery, take these vital steps to truly win the lottery in life. With the right mindset, you can be both happy and wealthy.